U.S. Approves New Drilling Operations in the Arctic

The U.S. Bureau of Safety and Environmental Enforement (BSEE) has given approval for Arctic exploration operations on the Outer Continental Shelf for the first time in more than two years.

The permit to drill was issued on Tuesday to Eni U.S. Operating Co. Inc. which submitted the application in August. Drilling the exploratory well from a man-made artificial island, Spy Island, in the Beaufort Sea is expected to start as early as this December.

Spy Island is located approximately three miles offshore of Oliktok Point, in State of Alaska waters. Both the island and Oliktok point are already home to Eni production facilities comprising 18 producing wells, 13 injector wells and one disposal well. Eni is now proposing to use extended-reach drilling techniques to drill into federal submerged lands.

The extended reach drilling will target a formation in the newly formed Harrison Bay Block 6423 unit, a 13-lease unit on the OCS that BSEE approved in December 2016. Eni will explore the Harrison Bay Block 6423 Unit in partnership with Shell and plans to drill two explorations wells plus two potential sidetracks over the next two years.

According to Eni, new exploratory well operations will add an additional 100-110 jobs during the drilling of the well, and any potential plan of development is dependent on the results of Eni’s proposed exploration wells. At a minimum, new development could lead to the creation of 100-150 jobs in the region and new production of 20,000 barrels of oil per day.

Oil production at Northstar Island in the Beaufort Sea is currently producing approximately 10,000 barrels of oil per day. A second project in the Beaufort Sea, known as Liberty, is currently open to public comment with the Bureau of Ocean and Energy Management. If permitted, Liberty would be the first completely federal OCS production facility in the Alaska Region.

“Responsible resource development in the Arctic is a critical component to achieving American energy dominance,” said BSEE Director Scott Angelle.